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Why Former Employers May Sue Over Non-Competes - Even Unenforceable Ones

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Jonathan Cooper
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In a case that was filed in Federal Court in Massachusetts just last month, Boston Beer Corporation - the manufacturer of the popular Samuel Adams beer - sued another brewery roughly 5% its size, California-based Anchor Brewers - claiming that the smaller brewery should be barred from hiring its $60,000 per year sales manager because otherwise, Boston Beer would stand to suffer "irreparable harm."

Given that this sales manager was moving jobs cross-country, was evidently a fairly low-level employee, and only worked for Boston Beer for one year, it should come as no surprise that New York's courts would be highly unlikely to uphold or enforce this non-compete agreement (provided, that is, that this employee wasn't using any information gleaned from his time at Boston Beer to now unfairly compete with them).

Under the circumstances, why bring the lawsuit?

Interestingly, it appears that different jurisdictions give greater (or lesser) deference to non-compete agreements. In this particular case, Massachusetts apparently favors upholding non-compete agreements moreso than California, or New York, for example.

Suing the smaller brewery in Massachusetts has the added benefit to Boston Beer of compelling its much smaller competitor to litigate the case in a far more inconvenient venue.

Category: General